Finance

EU holds up Hungary’s recovery money in rule-of-law standoff By Reuters

© Reuters. FILE PHOTO: European Union flags flutter outside the EU Commission headquarters in Brussels, Belgium May 5, 2021. REUTERS/Yves Herman

By Gabriela Baczynska

BRUSSELS (Reuters) – The European Union’s executive missed its own deadline to sign off on billions of euros in economic recovery aid to Hungary, delaying its decision in an attempt to win rule-of-law concessions from Budapest.

Hungary is set to receive 7.2 billion euros in EU stimulus funds meant to kickstart economic growth mauled by the coronavirus pandemic.

The funds will start flowing once the Brussels-based European Commission accepts national plans on how to spend them to ensure digital and green transition, among others goals.

However, the Commission is using the money as leverage to push Hungary on the rule of law, an area where the increasingly authoritarian Prime Minister Viktor Orban has clashed in the EU.

A spokeswoman for the Commission said on Monday it was still analysing the plan Budapest submitted and might propose a longer delay should it consider “months rather than days” were still needed to decide on it.

While the spokeswoman declined to give detail, the bloc’s Economics Commissioner Paolo Gentiloni said last week: “We are working on aspects to do with the respect for the rule of law.”

The Commission has long wanted Hungary to improve its public procurement process to combat “systemic irregularities” – or fraud.

Orban has also infuriated many of his EU peers in recent weeks with a new legislation that bans from schools materials seen as promoting homosexuality, the latest in a series of laws seen as discriminatory and restricting people’s rights.

Budapest has clashed with the EU on multiple occasions over Orban’s treatment of migrants and gay people, as well as the tightening of curbs around the freedom of media, academics and judges.

Orban portrays himself as a crusader for what he says are traditional Catholic values under pressure from the liberal West.

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